All Forum Posts by: Adah N.

Could not raising rent because you want to be a liked or "good" landlord or you want to keep tenants be bad for your good tenants in the long run?  How about collecting close to market and using some towards "bonus" upkeep and upgrades?  

How could it be bad for your tenants? If you are collecting $1000 but market rent is $1500, because you have not raised rent to keep up with market, what happens when you go to sell? Will you sell below market? Will tenants face a rent hike or have to move when you sell?

Has it been 10 years since you pressure washed property and driveway? Are the toilets from 30 years ago when the house was built?  Is the carpet worn and could really need a new one? Everyone likes stainless steel appliances, if yours are the white ones from 20+ years ago, how about changing the microwave or dishwasher or fridge or all 3 to stainless steel?

Tenants also like nice houses, how about keeping the property nicer than market and keep up with market rent or slightly lower? Thoughts?

@Tyler Lee

I think he has been keeping up with needed repairs and maintenance.

You know what I just realized, this whole notion of not raising rent because landlord wants to be a “good” landlord and wants to “keep” tenants can actually be bad for good tenants.

Best to raise rent to keep up with market or a little under market but give incentives or update/upgrade property to a little better than market grade.

@Nathan G.

I see how it would cause animosity or tense owner/resident relationship.

I agree it may be best to just give notice.

@Scott M.

Thanks Scott.

No rent control, lease is month to month. Units look fine overall and should command 60% more with the usual tenant turnover cleaning, painting . Roof looks fine, HVAC is from the ice age but works. Will need an inspection to get the other details.

The biggest problem is how much increase is too much at a time. I get 10%-30%, anything more seems excessive. Best to ask them to leave but they will not get anything close to what they are paying. Rent is really from 10 years ago for that part of town.

@Mike Dymski

Unfortunately investors are going crazy bidding up investment properties in my market and artificially driving up rents.

Even with market rate rent and purchase price, the returns are not great in my market.

@Bruce Woodruff

Lol! No not planing to be a slumlord, I don’t think the current owner is though. He says rent is so low because they are great tenants and he has not raised rents in years. I will find out soon enough.

@Nathan G.

Tenants are actually on month to month. Which seems to be the new trend.

My biggest hang up is the need to raise rent by so much. As is, it needs about 60% increase. It needs about 80+% if upgrade a little to meet market as well as purchase price it. Unfortunately purchase price is already at market due to too much demand.

How much is too much of a rent increase? State and city laws are not an issue.

@Sean McKee

Thanks Sean. I think the biggest cause of lag in current rent is no rent increase over the years. Based on photos it needs flooring, appliances and paint to command market rent. Of course big ticket items like roof and HVAC may need to be changed but I don’t think those affect market rent as long as they are currently functional. The purchase price is however market rate.

Have you had to communicate the big rent increase on the new purchase? How did it go? Will you renovate with tenants in place?

@Patti Robertson

Thanks Patti, that sounds like a good plan. The market rent certainly supports the purchase price. However, not sure about the building.

How do you communicate to someone their rent will have to go up 80+% to come close to market rate? In small chunks or one big bite? Does that thought make you want to think twice about buying?

@Chi Ta

I called and emailed around lately. Did not find any, they all required 20%. Even hard money lenders that charge higher interest and 2-4 points want 20%